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Paying For Dementia Care: What Are Your Options?

A variety of financial resources may be available to assist in covering the costs of Alzheimer's or other dementia care. Others may be applicable now or in the future.

Insurance

Medicare is the primary source of health insurance for the majority of adults aged 65 and older.

Private insurance, an employee group plan, or retiree health coverage may also be in effect.

If the dementia patient is younger than 65 (called younger-onset Alzheimer's), they may have private insurance, a group employee health plan, or retiree medical coverage. Check how quickly Alzheimer's disease expenses will be reimbursed under the new policy if they change coverage.

Personal Assets

Personal Assets

Personal assets — whether they belong to the individual with dementia or to other family members — can be used to fund care. These consist of:

  • Investments — such as stocks, savings accounts, bonds, and real estate
  • Personal property — such as jewelry or artwork

A reverse mortgage is a process that converts the equity in a home into cash. This loan allows a homeowner 62 or older to turn a part of their home's equity into cash while retaining ownership. Age, home equity, and the lender's interest rate are typical determinants of the amount a borrower can receive. Reverse mortgages have no effect on Social Security or Medicare benefits, but they may impact eligibility for other government programs.

Employee Benefits

Benefits may include paid sick leave, short-term disability benefits, and a flexible spending account if the Alzheimer's patient continues to work during the early stages of the condition (covers payment for out-of-pocket medical expenses with pretax dollars, for potential savings of about 20-30%).

Make sure to:

  • Check the employer's benefits manual
  • Ask the benefits specialist what benefits may be accessible, such as paid sick leave or any short-term disability benefits that the employer may provide (typically for one year or less)
  • Keep all benefit confirmations in writing

Government Assistance

In addition to Medicare, a person with dementia may be eligible for several other public programs. These programs give qualified individuals with monetary assistance or long-term care services. This includes Supplemental Security Income (SSI), veteran benefits, Medicaid, and tax deductions and credits.

Retirement Benefits

Even if the senior with dementia has not yet reached retirement age, retirement plan benefits can give essential financial resources.

Retirement plans include:

Typically, pension plans provide payments to disabled workers prior to their retirement age if they meet the plan's requirements.

A person with dementia may also be eligible to receive funds from their IRA or employer-funded retirement plan prior to age 59 and a half without incurring the standard 10% early withdrawal penalty. This sum will typically be considered ordinary income, and taxes will need to be paid on it.

In this situation, if withdrawals can be deferred until after the individual leaves their job, income taxes will likely be reduced because the individual will likely fall into a lower tax rate. If Social Security disability conditions are met, benefits are also possible prior to retirement age.

Community Support Services

Numerous community organizations offer free or low-cost services, such as support groups, respite care, transportation, and meal delivery. You may also consider informal care arrangements involving family, friends, neighbors, religious communities, and volunteer organizations.

Check out this other article by Senior Strong to check if Medicaid can cover dementia care facilities.

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